SpaceX Strikes $60 Billion Cursor Deal in AI Coding Race

Elon Musk’s SpaceX has agreed to acquire Anysphere, the startup behind the popular AI coding platform Cursor, for $60 billion.

The all-stock transaction is designed to strengthen SpaceX’s position in the fast-growing enterprise AI tools market. It follows the company’s major Nasdaq debut last week, which pushed its valuation above $2 trillion.

Acquisition Strengthens SpaceX’s AI Strategy

The deal will give xAI, which SpaceX acquired in February, a stronger presence in AI-assisted software development.

AI coding has emerged as one of the earliest areas where artificial intelligence companies have generated significant revenue from business customers. Therefore, gaining a larger share of this market could become an important part of SpaceX’s long-term growth strategy.

SpaceX reportedly told IPO investors that its total addressable market could reach $28.5 trillion. That figure represents the theoretical maximum revenue opportunity across its targeted industries, with enterprise AI expected to account for a substantial share.

Cursor Competes With OpenAI and Anthropic

Cursor is one of several Silicon Valley platforms attracting developers through AI-powered coding automation.

The platform can help programmers write, review and modify code more efficiently. As a result, Cursor has become an increasingly important competitor to major AI companies such as OpenAI and Anthropic.

However, limited access to computing infrastructure has restricted the startup’s ability to expand as quickly as its larger rivals.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Cursor lacks the scale of OpenAI and Anthropic. Nevertheless, he noted that the company has developed impressive coding models relative to its operating costs, making the acquisition strategically attractive for SpaceX.

SpaceX Had Been Considering Cursor Deal for Months

SpaceX had reportedly been evaluating a potential Cursor transaction for several months.

In April, the company announced an option to purchase the startup for $60 billion later in the year. Alternatively, SpaceX could have paid $10 billion for a commercial partnership.

The acquisition suggests that SpaceX ultimately decided full ownership would provide greater strategic value than a limited collaboration.

Cursor Data Could Improve Grok AI Models

In its IPO filing, SpaceX said Cursor’s developer data could help improve xAI models such as Grok.

This information includes coding requests, software design decisions and other interactions generated by developers using the platform.

Access to such data could help xAI train more capable coding models and improve Grok’s ability to assist users with software development tasks.

SpaceX also announced that it plans to release an AI model through Cursor. In addition, the company will introduce Grok Build, xAI’s own coding agent.

According to SpaceX, Cursor and xAI have been jointly training Grok Build for several months.

Deal Expected to Close in Third Quarter

The $60 billion all-stock acquisition is expected to close during the third quarter of 2026.

SpaceX will not use funds raised through its IPO to finance the transaction. Instead, the company will issue shares to complete the purchase.

Using stock allows SpaceX to take advantage of its high market valuation. It can therefore complete a major acquisition while surrendering a relatively small percentage of its overall equity.

Billionaire investor Bill Ackman argued that SpaceX’s valuation makes the Cursor transaction less expensive in terms of shareholder dilution.

SpaceX Shares Rally Following Acquisition

SpaceX shares climbed approximately 10% in early trading after the deal was announced.

The increase placed the company on course to add around $247 billion to its market capitalization, which stood at approximately $2.53 trillion.

At $211.27 per share, SpaceX stock had risen more than 56% from its IPO price of $135.

Should those gains continue, SpaceX could overtake Amazon by market value and become the world’s fifth-largest publicly traded company.

Cursor Reports Rapid Revenue Growth

Cursor’s business has expanded quickly since Anysphere was founded in 2022.

According to company data shared with Reuters, the platform generates approximately $2.6 billion in annualized business-to-business revenue. Its enterprise sales have also increased sharply.

The San Francisco-based startup has attracted backing from several prominent technology investors.

Its shareholders include Andreessen Horowitz, Thrive Capital, Nvidia and Alphabet-owned Google.

Before the SpaceX acquisition was announced, Cursor had reportedly been discussing a new funding round that could have valued the company at approximately $50 billion.

SpaceX Faces Major Termination Fees

The agreement includes substantial termination payments if the acquisition fails under certain conditions.

SpaceX will pay Anysphere a $10 billion termination fee if the transaction collapses for specific reasons outlined in the regulatory filing.

However, the payment would fall to $4 billion if competition authorities prevent the deal from proceeding due to antitrust concerns.

Data Center Agreements Could Remain in Place

It remains uncertain whether the Cursor acquisition will affect SpaceX’s existing agreements to lease data center capacity to other AI companies.

In recent weeks, SpaceX has reached cloud computing agreements with Anthropic and Google. Combined, those contracts are worth approximately $26 billion annually.

Both agreements contain 90-day termination clauses. Therefore, SpaceX could potentially reclaim the computing capacity if demand from Grok and Cursor rises significantly.

D.A. Davidson analyst Gil Luria said SpaceX could eventually redirect that infrastructure toward its internal AI products. However, he expects the company to continue providing computing resources to Anthropic and Google for the foreseeable future.